A Crisis in Confidence

The global economy can't seem to get its groove back. The stock market is gyrating wildly on any scrap of information. Politicians on both sides of the aisle in Washington are busy playing the blame game for the current economic malaise.

Closer to home in the electrical market, the continuing slump in the nonresidential construction market and the horror show in the residential market have snuffed out prospects for any substantial growth in the near future. To top it all off, Twitter, blogs, Facebook and other online tools of communication add oxygen to the controversies and concerns over all of the above and blow everything out of proportion. It's no wonder manufacturers are hesitant to invest in their companies or hire new employees.

Despite all the bad economic and political news, there are still some reasons to be cheerful in the technological revolutions that kept percolating after the recession officially started in late 2007 and are changing the way we live and work: mind-blowing changes in mobile communications; how content is created and consumed on the internet; and how electrical power is created, transported and used.

Let's look first at how the tablet computer is changing mobile communications. Apple came out with its iPad in January 2010 and in less than two years sold 17 million of these tablet computers. Since the official start of the recession, the company's stock price has more than doubled to over $400 per share. While Apple got a huge head start in the market for tablet computers with the iPad, several industry insiders say tablets using the Android operating system will eventually clean up in the business market because of their open operating systems and the fact that relatively few businesses rely on Apple computer systems.

Still not interested in tablets? You should be. Manufacturers are starting to figure out how salespeople at distributors and reps can use tablets to market their products, and your customers may soon be using them and smart phones to order products.

The recession also didn't stop the revolution in how content is created and consumed on the Internet. Facebook has grown from 20 million users in Oct. 2007 to more than 800 million users today, and Twitter says its growth in “tweets” has grown from 5,000 per day in 2007 to 200 million per day in 2011. Even if you have sworn off these social media formats as incredible timewasters, you still need to be aware that your younger customers use them to communicate with each other the way you and I used to use dial phones to actually talk to each other.

Then there's the question of where to store all of the inane tweets, Facebook postings and YouTube videos. Most of it resides in humungous data warehouses that require an awful lot of electrical and VDV equipment for power, lighting cooling and communications. Clayton Moran, a senior analyst for Benchmark Co., said in the Wall Street Transcript that he expects the data warehouse market to grow 15 percent to 20 percent a year because of “the digitization of the economy.” “E-commerce, online video distribution, cloud computing, algorithmic financial trading, mobile data — all these developing sectors have strong secular growth outlooks and utilize Internet Protocol and Internet infrastructure,” he said in that posting, “IP traffic is forecast by Cisco to grow 30 percent to 40 percent per year.”

And over the past few years, we have devoted barrels of ink in EW to alert readers about opportunities in the green market. Maybe you aren't a big believer in the market for electrical products related to the construction of photovoltaic arrays, wind farms and other renewable sources of energy, or aren't ready yet to jump into LEDs. These markets may not yet be ready for prime time in the mainstream electrical wholesaling industry, but you can't deny how much they have grown over the past few years.

You also can't look past the billions of dollars that major electrical manufacturers have been spending during the past four years on R&D and acquisitions for smart grid products and charging stations for electric vehicles.

These technological advances by themselves won't cure unemployment or the lack of nonresidential construction. But they will all be important parts of the new economy when global economic conditions improve.

Webinars

The North American electrical wholesaling industry is being rocked by mergers & acquisitions, advances in technology, new competition from offshore and an uncertain economy. In this 60-minute webinar, Electrical Wholesaling Chief Editor Jim Lucy will discuss the changes in the electrical market now having the most impact on electrical distributors, electrical manufacturers and independent manufacturers’ reps....More